Jog Engineering Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2015

We have audited the attached Balance Sheet of Jog Engineering Limited as at 31st March 2015 and also Profit and Loss Statement and Cash Flow statement of the Company for the year ended on that date and a summary of the significant accounting policies and other explanatory information. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

Management's Responsibility for the Financial Statement

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (The Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standard on auditing issued by the Institute of chartered Accountants of India. Those Standards required that we comply with ethical requirements and plan and performs the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risk of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessment, the auditor consider internal control relevant to the company's preparation and fair presentation of the financial statement in order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting polices used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We behave that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

a) Attention is invited to the following notes:

i) Note of financial statement no. 2.1 regarding non-provision of interest payable on deposits from public on period after maturity, which are matured but not paid of amount Rs. 208.07 Lac.

ii) Note of financial statement no. 13 regarding diminution in value of long term equity investment in Mahakali Flyover Company Limited having value Rs. 69.97 Lac.

b) We are unable to express an opinion on the treatment required to be given to the following items and on the ultimate recoverability of the under-mentioned debts / advances /claims.

i) Note of financial statement No. 15 regarding long term trade receivables outstanding for more than five years: Claims aggregating to Rs. 5,328.11 Lac (out of which Rs. 3,991.30 Lac receivable from subsidiary Company) taken as income in earlier years considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

ii) Note of financial statement No. 14 regarding Loans and advances given to related parties, claims aggregating to Rs. 711.45 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

iii) Note of financial statement No. 14 regarding deposits and advances with other than related parties, claims aggregating to Rs. 366.13 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

So the effects of above on profit and loss of Company cannot be ascertained.

c) In our opinion, the company do not have going concern status for reasons stated in note no. 3 of financials statement.

However, as per the management's view, the company has business prospects as stated in note no. 3 and accounts has been drawn on the basis of going concern assumption.

We are unable to determine financial impact due to adjustment that may have to be made to the value of assets and liabilities in case such assumption of going concern basis is vitiated in any manner.

d) Without considering the matters referred para "b" and "C above, the effect of which could not be determined and where we are unable to express an opinion, for the reasons stated in that paragraph, had the observations made by us in para "a (i) and (ii)" above been considered, there would be a loss of Rs. 987.80 Lac for the year ended 31st March 2015 (as against the reported figure of loss of Rs. 709.76 Lac), Reserve & surplus Account (Debit balance being accumulated loss) would have been Rs. 5710.48 Lac (as against the reported figure of Rs. 5432.44 Lac).

Subject to our comments above, the financial statement give the information required by the act in the manner so required and give a true and fair view in conformity with the accounting principle generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2015;

b) in the case of the Profit & Loss Statement of the loss for the year ended on that date;

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

a) As required by the Companies (Auditor's Report) Order, 2015 ('the Order') issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

b) As required by Section 143(3) of the Act, we report that:

i) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

ii) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books

iii) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

iv) In our opinion, subject to:

1. Note of financial statement no. 22 regarding recognition of certain claims as revenue in earlier years without evidence of final acceptability of the claims aggregating to Rs. 595.18 Lac (forming part of Debtors) which is not in accordance with Accounting Standard 7- "Accounting for construction contracts"

2. Note to Financial Statement no. 16 regarding valuation of inventory aggregating Rs. 262.71 Lac of which net realizable value can not be ascertained, which is not in accordance with Accounting Standard 2- "Valuation of inventory".

3. Note of financial statement no. 13 regarding valuation of non-current investment in subsidiary Company Mahakali Flyover Co. Ltd aggregating to Rs. 69.97 Lac, which is not in accordance with Accounting Standard-13 "Accounting for investment".

The Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

v) The Directors are disqualified as on 31st March 2015 from being appointed as a Director in term of section 164(2) of the Act.

vi) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 24 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund, by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

(1) The company is maintaining proper records to show full particulars including quantitative details and situation on Fixed Assets. The physical verification of fixed assets has been carried out at reasonable intervals by the management during the year and no material discrepancies were noticed on such verification. None of the Fixed Assets has been revalued during the year.

(2) (a) The inventory of construction material, consumables, stores and spare parts at the Company's one site having value Rs. 11.51 Lac for which criminal proceeding is in court of law. Pursuant to termination of a contract, Stocks having value of Rs. 251.20 Lac at the other site have been taken over by the Client of that site, which is a Company fully owned by the GoM and valuation thereof is as at the time of taking over by the Client. The matter in respect of termination and its after-effects, including settlement of accounts is subjudice in the Honble Bombay High Court. The net realizable value of this inventory cannot be ascertained.

(b) The stock at sites cannot be verify by management due facts narrated above.

(c) The Company is maintaining proper records of Inventory.

(3) (a) As per the information and explanation given to us and the records produced to us for verification, the Company has made payment in previous period on behalf of / paid advances to the companies , firm and other parties covered under register maintained under section 189 of the Act as following:

(i) Mahakali Flyover Company Ltd. (a subsidiary the Company) Rs. 550.00 Lac: Pursuant to encashing by the PWD-GoM a Bank Guarantee of equal amount issued by the Company's Bank, for a contract that was assigned to this subsidiary:

(ii) Mr. P. P. Sheth (Director of the Company) Rs. 121.45 Lac,

(iii) M&P Associates (Partnership firm in which directors are Partners): Rs. 40 Lac, for purchase of a flat admeasuring 900 square feet in Dadar, Mumbai for a total consideration of Rs. 45 Lac.

(b) According to the information and explanations given to us, we are of the opinion that the rate of interest and conditions of such loans given by the Company is prima facie prejudicial to the interest of the Company as no interest is charged on such loans.

(c) We are unable to comment on regularity of repayment of principal amount because the terms of repayment have not been stipulated. These loans are interest free.

(d) As per the information and explanations given to us, efforts are being made for recovery of amount outstanding as considered appropriate by the management.

(4) In our opinion and according to the information and explanations given to us and having regard to the explanation there is adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to expenses , purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(5) The company has not accepted deposit during the year. However following is status of the public deposit accepted previously and not paid

(a) The Company has defaulted w.e.f. f October 2002 onwards in repayment of deposits matured and claimed and the outstanding amount of such unpaid matured deposits and interest thereon upto the date of maturity as on 31st March 2015 is Rs. 126.60 Lac (P/Y Rs. 126.71 Lac).

(b) Appropriate intimation of default was sent to the Company Law Board, Mumbai from time to time, in respect of each month since default

(c) The Company had filed an application under section 58A of old Company Act, 1956 to Central Government for granting extension of repayment of deposits. The Company Law Board vide its order dated 14th June 2010, has allowed the Company to repay the overdue and matured deposits upto 31st March 2011. But the Company has made default in payment as per order.

(6) The provisions of clause 3 (vi) of the Order are not applicable to the Company as the respective entities are not covered by the Companies (Cost Records and Audit) Rules, 2014.

(7) a. . According to the records of the Company, undisputed statutory dues including Income Tax, Sales Tax, Fringe Benefit Tax and other statutory dues have not been regularly deposited with the appropriate authorities. Provident Fund and ESI dues have generally been regularly deposited with the appropriate authorities during the year. There were no payments in respect of Customs Duty/ Excise Duty/ Service Tax during the year. Based on the audit procedure and according to the information and explanatbn given to us the extent of arrears of outstanding statutory dues as at the end of the year for a period of more than 6 months from the date they became payable are as under in Rs. Lac:

Nature 0f Dues As on 31/03/2015 (Rs. In lac)

Income Tax / TDS 38.62

Sales Tax 24.05

Works Contract Tax 206.49

Fringe Benefit Tax 2.79

b. According to the information and explanations given to us and the records of the Company, the dues of income Tax which have not been deposited on account of any dispute, are as follows in Rs. Lac:

Nature of Dues Amount (Rs.In lac) Forum where pending

Income Tax AY2008-09 212.89 Commissioner of

Income Tax A. Y. 2003-04 13.21 Income tax(Appeals)

Income Tax A. Y. 2005-06 9.63

(8) The accumulated losses of the Company as at 31s' March 2015 are not less than 50% of the net worth of the Company and it has incurred cash losses in the current financial period and in the immediately preceding financial period.

(9) Based on our audit procedures and according to the information and explanations given to us the Company has defaulted in repayment of dues to financial institutions, banks and amount of default is as stated hereunder in Rs. Lac

No. Name of the Bank/ Amount of default as on Financial Institution 31/03/2015 (As per books of accounts)

1 Bank of Maharashtra 1543.63

2 Andhra Bank 4198.39

3 Development Credit Bank Ltd /ARCIL 2,754.88

4 IDBI Bank 1,265.95

Total 9762.86

(Refer Note No.6 of financial statement)

(10) The Company has given in earlier period, guarantee for loan taken by subsidiary from bank. The said guarantee has since been invoked by the beneficiary has been contested by Company.

(11) No term loans have been availed by the Company during the year.

(12) Based upon the audit procedures performed and according to the information and explanations given and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

FOR S. H. ANDEKAR & COMPANY CHARTERED ACCOUNTANTS (FRN -100319W) S. H. AMDEKAR Proprietor Membership No. 37978 Pune, 31st August 2015

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Mar 31, 2014

Report On the Financial Statement

We have audited the attached Balance Sheet of Jog Engineering Limited as at 31st March 2014 and also Profit and Loss Statement and Cash Flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

Management''s Responsibility for the Financial Statement

Management is responsible for the preparation of these financial statement that give a true and fair view of the financial position, financial performance of the company in accordance with the accounting standards referred to in sub section (3C) of section 211 of the companies act 1956 ("the act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the give a true and the fair view and are free material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standard on auditing issued by the Institute of chartered Accountants of India. Those Standards required that we comply with ethical requirements and plan and performs the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risk of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessment, the auditor consider internal control relevant to the company''s preparation and fair presentation of the financial statement in order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting polices used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We behave that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

a) Attention is invited to the following notes:

i) Note of financial statement no. 2.1 regarding non-provision of interest payable on deposits from public, which are matured but not paid of amount Rs. 193.71 Lac.

ii) Note of financial statement no. 13 regarding diminution in value of long term equity investment in Mahakali Flyover Company Limited having value Rs. 69.97 Lac.

b) We are unable to express an opinion on the treatment required to be given to the following items and on the ultimate recoverability of the under-mentioned debts / advances /claims.

i) Note of financial statement No. 15 regarding long term trade receivables outstanding for more than five years: Claims aggregating to Rs. 5,328.11 Lac (out of which Rs. 3,991.30 Lac receivable from subsidiary Company) taken as income in earlier years considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

ii) Note of financial statement No. 14 regarding Loans and advances given to related parties, claims aggregating to Rs. 729.40 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

iii) Note of financial statement No. 14 regarding deposits and advances with other than related parties, claims aggregating to Rs. 366.13 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

So the effects of above on profit and loss of Company cannot be ascertained.

c) We have relied on the Management perception in relation to business prospects as stated in note no. 3 while accepting the appropriateness of the going concern assumption for drawing up the accounts for the period. We are unable to form an opinion in the matter and are unable to express any view on any adjustment that may have to be made to the value of assets and liabilities in case such assumption of going concern basis is vitiated in any manner.

d) Without considering the matters referred para "b" and "c" above, the effect of which could not be determined and where we are unable to express an opinion, for the reasons stated in that paragraph, had the observations made by us in para "a (i) and (ii)" above been considered, there would be a loss of Rs. 957.22 Lac for the year ended 31st March 2014 (as against the reported figure of loss of Rs. 693.54 Lac), Reserve & surplus Account (Debit balance being accumulated loss) would have been Rs. 4879.75 Lac (as against the reported figure of Rs. 4616.07 Lac).

Subject to our comments above, the financial statement give the information required by the act in the manner so required and give a true and fair view in conformity with the accounting principle generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014;

b) in the case of the Profit & Loss Statement of the loss for the year ended on that date;

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

a) As required by the Companies (Auditor''s Report) Order, 2003, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

b) Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books.

iii) The Balance Sheet, Profit and Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of account.

iv) In our opinion, subject to:

1. Note of financial statement no. 24 regarding recognition of certain claims as revenue in earlier years without evidence of final acceptability of the claims aggregating to Rs. 595.18 Lac (forming part of Debtors) which is not in accordance with Accounting Standard 7- "Accounting for construction contracts"

2. Note to Financial Statement no.16 regarding valuation of inventory aggregating Rs. 262.71 Lac of which net realizable value can not be ascertained, which is not in accordance with Accounting Standard 2- "Valuation of inventory".

3. Note of financial statement no. 13 regarding valuation of non-current investment in subsidiary Company Mahakali Flyover Co. Ltd aggregating to Rs. 69.97 Lac, which is not in accordance with Accounting Standard -13 "Accounting for investment".

The Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3(C) of Sec. 211 of the Companies Act 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013..

v) The Directors are disqualified as on 31st March 2014 from being appointed as a director in term of clause (g) of sub-section 1 of section 274 of the Companies Act 1956.

ANNEXURE TO THE AUDITORS'' REPORT

STATEMENT REFERRED IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF JOG ENGINEERING LIMITED ON THE ACCOUNTS FOR THE PERIOD ENDED 31st MARCH 2014

(1) The company is maintaining proper records to show full particulars including quantitative details and situation on Fixed Assets. The physical verification of fixed assets has been carried out at reasonable intervals by the management during the year and no material discrepancies were noticed on such verification. None of the Fixed Assets has been revalued during the year.

(2) (a) The Inventory of construction material, consumables, stores and spare parts at the Company''s one site having value Rs. 11.51 Lac for which criminal proceeding is in court of law. Pursuant to termination of a contract, Stocks having value of Rs. 251.20 Lac at the other site have been taken over by the Client of that site, which is a Company fully owned by the GoM and valuation thereof is as at the time of taking over by the Client. The matter in respect of termination and its after-effects, including settlement of accounts is subjudice in the Hon''ble Bombay High Court. The net realizable value of this inventory cannot be ascertained.

(b) The stock at sites cannot be verify by management due facts narrated above.

(c) The Company is maintaining proper records of Inventory.

(3) (a) As per the information and explanation given to us and the records produced to us for verification, the Company has made payment in previous period on behalf of / paid advances to following:

(i) Mahakali Flyover Company Ltd. (a subsidiary the Company) Rs. 550.00 Lac: Pursuant to encashing by the PWD-GoM a Bank Guarantee of equal amount issued by the Company''s Bank, for a contract that was assigned to this subsidiary:

(ii) Mr. P. P. Sheth (Director of the Company) Rs. 122.45 Lac.

(iii) Ad-dict (the Proprietor of a Dissolved partnership firm ViMa Productions, in which the Company was a partner) Rs. 16.95 Lac.

(iv) M&P Associates (Partnership firm in which directors are Partners): Rs. 40 Lac, for purchase of a flat admeasuring 900 square feet in Dadar, Mumbai for a total consideration of Rs. 45 Lac.

(b) According to the information and explanations given to us, we are of the opinion that the rate of interest and conditions of such loans given by the Company is prima facie prejudicial to the interest of the Company as no interest is charged on such loans.

(c) We are unable to comment on regularity of repayment of principal amount because the terms of repayment have not been stipulated. These loans are interest free.

(d) As per the information and explanations given to us, efforts are being made for recovery of amount outstanding as considered appropriate by the management. As a result of these efforts, the Company entered into an Agreement with Late Mr. Vinay Apte of Ad- dict, where under, he will repay Rs. 45 Lac to the Company against the book balance of Rs. 37.95 Lac. Out of this sum of Rs. 45 Lac, Mr. Apte has paid Rs. 21 Lac in earlier years and has committed to pay Rs. 12 Lac each before 30th September 2013 and 30th September 2014.However these terms were not obeyed by Late Mr. Vinay Apte.

(4) In our opinion and according to the information and explanations given to us and having regard to the explanation there is adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to expenses , purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(5) (a) Based on the audit procedure applied by us and according to information and explanation given to us, transaction that need to be entered into register maintained in pursuance of section 301 of the Company Act 1956 have been so entered.

(b) According to the information and explanation given to us in respect of transactions (excluding the loans reported in the para (3) above) in excess of Rs. 5 Lac in respect of any party, in our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

(6) In our opinion and according to the information and explanation given to us, the Company has not complied with the provisions of Section 58A, Section 58-AA or any other relevant provision of the act and the rules framed there under as follows:

(a) The Company has defaulted w.e.f. 1st October 2002 onwards in repayment of deposits matured and claimed and the outstanding amount of such unpaid matured deposits and interest thereon upto the date of maturity as on 31s March 2014 is Rs. 126.71 Lac (P/Y Rs. 127.28 Lac).

(b) The principal amount of Public fixed deposits matured for repayment and claimed by the depositors, which remain unpaid as on 31st March 2014 amount to Rs. 61.91 Lac in case of small depositors and Rs. 43.77 Lac in all other cases. Appropriate intimation of default was sent to the Company Law Board, Mumbai from time to time, in respect of each month since default.

(c) The Company had filed an application under section 58A of Company Act, 1956 to Central Government for granting extension of repayment of deposits. The Company Law Board vide its order dated 14th June 2010, has allowed the Company to repay the overdue and matured deposits upto 31s March 2011. But the Company has made default in payment as per order.

(7) The Company has an internal audit system conducted by its own staff members, commensurate with the size and nature of the business of the Company.

(8) The Central Government has prescribed the maintenance of cost records u/s 209(I)(d) of the Companies Act 1956, for the Company. In absence of any construction activity the Company has not maintained cost records.

(9) According to the records of the Company, undisputed statutory dues including Income Tax, Sales Tax, Fringe Benefit Tax and other statutory dues have not been regularly deposited with the appropriate authorities. Provident Fund and ESI dues have generally been regularly deposited with the appropriate authorities during the year. Unclaimed dividend has been deposited with the Investor Education and Protection Fund as required. There were no payments in respect of Customs Duty/ Excise Duty/ Service Tax during the year. Based on the audit procedure and according to the information and explanation given to us the extent of arrears of outstanding statutory dues as at the end of the year for a period of more than 6 months from the date they became payable are as under in Rs. Lac:

As on 31/03/2014 Nature of Dues (Rs.In lac)

Income Tax / TDS 36.60

Sales Tax 24.05

Works Contract Tax 206.49

Fringe Benefit Tax 2.79

(10) According to the information and explanations given to us and the records of the Company, the dues of Income Tax which have not been deposited on account of any dispute, are as follows in Rs. Lac: Nature of Dues Amount Forum where pending (Rs. In Lac)

Income Tax A.Y. 2008-09 212.89 CIT (Appeals)

Income Tax A.Y. 2003-04 13.21 CIT (Appeals)

Income Tax A.Y. 2005-06 9.63 CIT (Appeals)

(11) The accumulated losses of the Company as at 31str March 2014 are not less than 50% of the net worth of the Company and it has incurred cash losses in the current financial period and in the immediately preceding financial period.

(12) Based on our audit procedures and according to the information and explanations given to us the Company has defaulted in repayment of dues to financial institutions, banks and amount of default is as stated hereunder in Rs. Lac

Amount of default as on Name of the Bank / 31.03.2014 No. Financial Institution (As per books of accounts)

1 Bank of Maharashtra 1,378.39

2 Andhra Bank 3,962.13

3 Development Credit Bank Ltd /ARCIL 2,576.44

4 IDBI Bank 1,206.55

Total 9123.53

(Refer Note No.6 of financial statement)

(13) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(14) The Company is not a chit fund, Nidhi / mutual benefit fund and therefore, the requirements pertaining to such class of companies are not applicable.

(15) The Company is not dealing or trading in shares, securities, debentures and other investments.

(16) The Company has given in earlier period, guarantee for loan taken by subsidiary from bank. The said guarantee has since been invoked by the beneficiary has been contested by Company.

(17) No term loans have been availed by the Company during the period.

(18) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an over all basis, funds raised on short term basis have prima facie not been used during the period for long term investments.

(19) The Company has not made any preferential allotment of share during the year to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(20) The Company has not issued any debentures during the year.

(21) The Company has not made any public issues during the year and therefore the question of disclosing the end use of money does not arise.

(22) Based upon the audit procedures performed and according to the information and explanations given and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

FOR S. H. AMDEKAR & COMPANY CHARTERED ACCOUNTANTS (FRN -100319W) S. H. AMDEKAR Proprietor Membership No. 37978 Pune, 28th August 2014

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Mar 31, 2013

Report On the Financial Statement

We have audited the attached Balance Sheet of Jog Engineering Limited as at 31st March 2013 and also Profit and Loss Statement and Cash Flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

Management''s Responsibility for the Financial Statement

Management is responsible for the preparation of these financial statement that give a true and fair view of the financial position, financial performance of the company in accordance with the accounting standards referred to in sub section (3C) of section 211 of the companies act 1956 (the act"). This responsibility includes the give a true and the fair view and are free material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standard on auditing issued by the Institute of chartered Accountants of India. Those Standards required that we comply with ethical requirements and plan and performs the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure In the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risk of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessment, the auditor consider internal control relevant to the company''s preparation and fair presentation of the financial statement in order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting polices used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We behave that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

a) Attention is invited to the following notes:

I) Note of financial statement no. 2.1 regarding non-provision of interest payable on deposits from public, which are matured but not paid of amount Rs. 179.31 Lac.

ii) Note of financial statement no. 13 regarding diminution in value of long term equity investment in MahakaKFiyover Company Limited having value Rs. 69.97 Lac. _

b) We are unable to express an opinion on the treatment required to be given to the following items and on the ultimate recoverability of the under-mentioned debts / advances /claims.

i) Note of financial statement No. 15 regarding long term trade receivables outstanding for more than five years: Claims aggregating to Rs. 5,328.11 Lac (out of which Rs. 3,991.30 Lac receivable from subsidiary Company) taken as income in earlier years considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

ii) Note of financial statement No. 14 regarding Loans and advances given to related parties, claims aggregating to Rs. 734.40 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery. If any, is not presently quantifiable.

iii) Note of financial statement No. 14 regarding deposits and advances with other than related parties, claims aggregating to Rs. 366.13 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable. <

So the effects of above on profit and loss of Company cannot be ascertained. .

c) We have relied on the Management perception in relation to business prospects as stated in note no. 3 while accepting the appropriateness of the going concern assumption for drawing up the accounts for the period. We are unable to form an opinion in the matter and are unable to express any view on any adjustment that may have to be made to the value of assets and liabilities in case such assumption of going concern basis is vitiated in any manner.

d) Without considering the matters referred para "b" and "c" above, the effect of which could not be determined and where we are unable to express an opinion, for the reasons stated in that paragraph, had the observations made by us In para "a (i) and (ii)" above been considered, there would be a loss of Rs. 493.94 Lac for the year ended 31st March 2013 (as against the reported figure of loss of Rs. 244.66 Lac), Reserve & surplus Account (Debit balance being accumulated loss) would have been Rs. 4,151.37 Lac (as against the reported figure of Rs. 3,902.09 Lac).

Subject to our comments above, the financial statement give the information required by the act in the manner so required and give a true and fair view in conformity with the accounting principle generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31M March 2013;

b) in the case of the Profit & Loss Statement of the loss for the year ended on that date;

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

a) As required by the Companies (Auditor''s Report) Order, 2003, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

b) Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books.

Hi) The Balance Sheet, Profit and Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of account. "

iv) In our opinion, subject to:

1. Note of financial statement no. 24 regarding recognition of certain claims as revenue in earlier years whit evidence of final acceptability of the claims aggregating to Rs. 595.18 Lac (forming part of Debtors) which is not in accordance with Accounting Standard 7- "Accounting for construction contracts"

2. Note to Financial Statement No. 16 regarding valuation of inventory aggregating Rs. 262.71 Lac of which net realizable value can '' not be ascertained, which is not in accordance with Accounting Standard 2- "Valuation of inventory".

3. Note of financial statement no. 13 regarding valuation of non-current investment in subsidiary Company Mahakali Flyover Co. Ltd aggregating to Rs. 69.97 Lac, which is not in accordance with Accounting Standard-13 "Accounting for Investment".

The Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3(C) of Sec. 211 of the Companies Act 1956.

v) The Directors are disqualified as on 31u March 2013 from being appointed as a director in term of clause (g) of sub-section 1 of section 274 of the Companies Act 1956.

(1) The company is maintaining proper records to show full particulars including quantitative details and situation on Fixed Assets. The physical verification of fixed assets has been carried out at reasonable intervals by the management during the year and no material discrepancies were noticed on such verification. None of the Fixed Assets has been revalued during the year.

(2) (a) The Inventory of construction material, consumables, stores and spare parts at the Company''s one site having value Rs. 11.51 Lac lor which criminal proceeding is in court of law. Pursuant to termination of a contract, Stocks having value of Rs. 251.20 Lac at the other site have been taken over by the Client of that site, which is a Company fully owned by the GoM and valuation thereof is as at the time of taking over by the Client. The matter in respect of termination and its after-effects, including settlement of accounts is subjudice in the Hon''ble Bombay High Court. The net realizable value of this inventory cannot be ascertained.

(b) The stock at sites cannot be verify by management due facts narrated above.

(c) The Company is maintaining proper records of Inventory.

(3) (a) As per the information and explanation given to us and the records produced to us for verification, the Company has made payment in previous period on behalf of / paid advances to following:

(i) Mahakali Flyover Company Ltd. (a subsidiary the Company) Rs. 550.00 Lac: Pursuant to encasing by the PWD-GoM a Bank Guarantee of equal amount issued by the Company''s Bank, for a contract that was assigned to this subsidiary:

(ii) Mr. P. P. Sheth (Director of the Company) Rs. 127.45 Lac,

(iii) Ad-dict (the Proprietor of a Dissolved partnership firm ViMa Productions, in which the Company was a partner).Rs. 16.95 Lac,

(iv) M&P Associates (Partnership firm in which directors are Partners): Rs. 40 Lac, for purchase of a flat admeasuring 900 square feet In Dadar for a total consideration of Rs. 45 Lac.

(b) According to the information and explanations given to us, we are of the opinion that the rate of interest and conditions of such loans given by the Company is prima facie prejudicial to the interest of the Company as no interest is charged on such loans.

(c) We are unable to comment on regularity of repayment of principal amount because the terms of repayment have not been stipulated. These loans are interest free.

(d) As per the information and explanations given to us, efforts are being made for recovery of amount outstanding as considered appropriate by the management. As a result of these efforts, the Company entered into an Agreement with Mr. Apte of Ad-dict, where under, he will repay Rs. 45 Lac to the Company against the book balance of Rs. 37.95 Lac. Out of this sum of Rs. 45 Lac, Mr. Apte has paid Rs. 21 Lac in earlier years and has committed to pay Rs. 12 Lac each before 30*'' September 2013 and 30th September 2014.

(4) In our opinion and according to the information and explanations given to us and having regard to the explanation there is adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to expenses , purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the Internal controls.

(5) (a) Based on the audit procedure applied by us and according to information and explanation given to us, transaction that need to be entered into register maintained in pursuance of section 301 of the Company Act 1956 have been so entered.

(b) According to the information and explanation given to us in respect of transactions (excluding the loans reported in the para (3) above) in excess of Rs. 5 Lac in respect of any party, in our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

(6) In our opinion and according to the information and explanation given to us, the Company has not complied with the provisions of Section 58A, Section 58-AA or any other relevant provision of the act and the rules framed there under as follows:

(a) The Company has defaulted w.e.f. f October 2002 onwards in repayment of deposits matured and claimed and the outstanding amount of such unpaid matured deposits and interest thereon up to the date of maturity as on 31a March 2013 is Rs. 127.28 Lac (P/Y Rs. 127.80 Lac).

(b) The principal amount of Public fixed deposits matured for repayment and claimed by the depositors, which remain unpaid as on 31" March 2013 amount to Rs. 62.36 Lac in case of small depositors and Rs. 43.77 Lac in all other cases. Appropriate intimation of default was sent to the Company Law Board, Mumbai from time to time, in respect of each month since default.

(c) The Company had filed an application under sect 58A of Company Act, 1956 to Central Government for granting extension of repayment of deposits. The Company Law Board vide its order dated 14*'' June 2010, has allowed the Company to repay the overdue and matured deposits up to 31" March 2011. But the Company has made default in payment as per order.

(7) The Company has an internal audit system conducted by its own staff members, commensurate with the size and nature of the business of the Company.

(8) The Central Government has prescribed the maintenance of cost records u/s 209(l)(d) of the Companies Act 1956, for the Company. In absence of any construction activity the Company has not maintained cost records.

(9) According to the records of the Company, undisputed statutory dues including Income Tax, Sales Tax, Fringe Benefit Tax and other statutory dues have not been regularly deposited with the appropriate authorities. Provident Fund and ESI dues have generally been regularly deposited with the appropriate authorities during the year. Unclaimed divider''* has been deposited with the Investor Education and Protection Fund as required. There were no payments in respect of Customs Duty/ Excise Duty/ Service Tax during the year. Based on the audit procedure and according to the information and explanation given to us the extent of arrears of outstanding statutory dues as at the end of the year for a period of more than 6 months from the date they became payable are as under in Rs. Lac:

As on 31/03/2013

NatureofDues (Rs. In lac)

Income Tax / TPS 36.63

Sales Tax 24.05

Works Contract Tax 206.49

"Fringe Benefit Tax 5.62

(10) According to the Information and explanations given to us and the records of the Company, the dues of Income Tax which have not been deposited on account of any dispute, are as follows in Rs. Lac:

Nature of Dues Amount (Rs. In Lac) Forum where pending

Income Tax A.Y. 2003-04 13.21 CIT (Appeals)

Income Tax A.Y. 2005-06 9.63 CIT (Appeals)

(11) The accumulated losses of the Company as at 31" March 2013 are not less than 50% of the net worth of the Company and It has Incurred cash losses in the current financial period and in the immediately preceding financial period.

(12) Based on our audit procedures and according to the information and explanations given to us the Company has defaulted in repayment of dues to financial institutions, banks and amount of default Is as stated hereunder in Rs. Lac

Name of the Bank/ Amount of default as on 31.03.2013 No Financial Institution (As per books of accounts)

1 Bank of Maharashtra 1,423.40

2 Andhra Bank 3,725.88

3 Development Credit Bank Ltd/ARCJL 2,401.50

4 IDBI Bank 1,147.16

Total 8,697.94

(Refer Note No.6 of financial statement)

(13) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(14) The Company is not a chit fund, Nidhi / mutual benefit fund and therefore, the requirements pertaining to such class of companies are not applicable.

(15) The Company is not dealing or trading in shares, securities, debentures and other investments.

(16) The Company has given in earlier period, guarantee for loan taken by subsidiary from bank. The said guarantee has since been invoked by the beneficiary has been contested by Company.

(17) No term loans have been availed by the Company during the period.

(18) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an over all basis, funds raised on short term basis have prima facie not been used during the period for long term investments.

(19) The Company has not made any preferential allotment of share during the year to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(20) The Company has not issued any debentures during the year.

(21) The Company has not made any public issues during the year and therefore the question of disclosing the end use of money does not arise. .

(22) Based upon the audit procedures performed and according to the information and explanations given and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

FOR S. H. AMDEKAR & COMPANY

CHARTERED ACCOUNTANTS

(FRN -100319W)

S. H. AMDEKAR Proprietor

Membership No. 37978

Pune, 30lh August 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheot of Jog Lngtneering Limited as at 31s1 March 2012 and also Profit and Loss Statement and Cash Mow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. T hose standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also . includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of tho said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit,

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of the books,

c) The Balance Sheet, Profit and Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, subject to:

i) Note of financial statement no. 23 regarding recognitbn of certain claims as revenue in earlier years without evidence of final acceptability of the claims aggregating to Hs. 595.18 Lac (forming part of Debtors) which is not in accordance with Accounting Standard 7~ "Accounting for construction contracts” it) Annexure to Auditor's Report regarding valuation of inventory aggregating Rs. 262.71 Lac of which net realizable value can not be ascertained, which is not in accordance with Accounting Standard 2- MValuation of inventory

ii) Note of financial statement no. 13 regarding valuation of non-current investment in subsidiary Company

Mahakali Flyover Co. Ltd aggregating to Rs. 69.97 Lac, which is not in accordance with Accounting Standard 13 "Accounting for investment

The Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3(C) of Sec. 211 of the Companies Act 1956.

e) the Directors are disqualified as on 31s1 March 2012 from being appointed as a director in term of clause (g) of sub section 1 of section 274 of the Companies Act 1956. However, directors arc appointed as directors of the Company by virtue approval by Ministry Of Corporate Affairs, Govt. Of India vide approval dated 31.03.2010.

f) In our opinion and to tho best of our information and according to tho explanations given to us, the said Balance Shoot and Protit & Loss Account road together with tho Company's accounting policios. and notes thereon give tho information required by the Companies Act 1956 in the manner so required.

g) Attention is invited to tho following notes:

i) Note of financial statement no. 2.4 regarding nonprovision of interest amounting to Rs. 4/0.86 Lac on mobilization / machinery advance received by the Company recoverable by the Contractee, through Company's running account bill.

ii) Note of financial statement no. 2.1 regarding non provision of interest payable on deposits from public, which arc matured but not paid of amount Rs. 164.88 Lac.

iii) Note of financial statement no. 13 regarding diminution in value of long term equity investment in Mahakali f lyover Company Limited having value Rs. 69.97 l.ac.

h) We arc unable to express an opinion on the treatment required to be given to the following items and on the ultimate recoverability of the under mentioned debts / advances /claims.

i) Note of financial statement No. 15 regarding Long form trade Receivables outstanding for more than five years: Claims aggregating to Rs. 5,328.11 Lac (out of which Rs. 3.991.30 Lac receivable from subsidiary Company) taken as income in earlier years considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

ii) Note of financial statement No. 14 regarding Loans and advances given to related parties, claims aggregating to Rs. 949.41 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

iii) Note of financial statement No. 14 regarding deposits and advances with other than related parties, claims aggregating to Rs. 1,146.26 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

So trie effects of above on profit and toss of Company cannot be ascertained.

i) Wo have relied on the Management perception in relation to business prospects as stated in note no. 3 while accepting the appropriateness of the going concern assumption for drawing up the accounts for the period. We are unable to form an opinion in the matter and are unable to express any view on any adjustment that may have to be made to the value of assets and liabilities in case such assumption of going concern basis is vitiated in any manner.

ii) Without considering the matters referred to in para 'h' and Y above, tho effect of which could not bo determined and where we are unable to express an opinion, for tho reasons stated in that paragraph, had the observations made by us in para "g (i), (ii) and (iii)" above boon considered, there would be a loss of Rs. 1,369.79 l.ac for tho period ended 31st March 201 iRs. (as against tho reported figure of toss of Rs. 664.08 l.ac). Profit & Loss Account (Debit balance boing accumulated loss) would have boon Rs. 4.672.09 Lac (as against tho reported figure of Rs. 3,966.38 L.ac).

5. Subject to our comments in paragraphs g, 'h', 'i' and 'j' abovo. the said accounts road with tho accounting policios and notes thereon give a true and fair view in conformity with tho accounting principles generally accepted in India:

a) in the case of tho Balance Shoot, of the state of affairs of tho Company as at 31sy March 201R:

b) in the case of tho Profit & L oss Statement of the loss for the year ended on that date:

c) in the case of Cash How Statement, of tho cash flows for tho year ended on that date.

ANNEXURE TO THE AUDITORS’ REPORT

(1)

(a) I'he Company has maintained records showing full particulars including quantitative details ot fixed assets.

(b) A detailed scrutiny, reconciliation and physical verification of all assets was carried out and fully tallied with tho f ixod Asset Register by management.

(c) As per the information and explanations given to us, tho disposals of assets during tho year wore not substantial so as to havo an impact on tho operations of tho Company or affect its going concern status.

(2)

(a) The Inventory of construction material, consumables, stores and spare parts at the Company's one site having value Rs. 11.51 Lac for which criminal proceeding is in court of law. Pursuant to termination of a contract, Stocks having value of Rs. 251.20 Lac at the other site have been taken over by the Client of that site, which is a Company fully owned by the GoM and valuation thereof is as at the time ot taking over by the Client. The matter in respect of termination and its after effects, including settlement of accounts is subjudice in the Hon’ble Bombay High Court. The net realizable value of this inventory cannot be ascertained.

(b) The stock at sites cannot be verified by the management due to the facts narrated above.

(c) The Company is maintaining proper records of Inventory.

(3)

(a) As por the information and explanation given to us and the records produced to us for verification, Company has made payment on behalf of / paid advances to following:

(i) Mahakali Hyovor Company Ltd. (subsidiary ot tho Company) Rs. 550,00 Lac: Pursuant to encashing by PWD GoM a Bank Guarantee of equal amount issued by the Company's Bank, for a contract that was assigned to this subsidiary:

(ii) Mr. P. P. Shoth (Director of Company) Rs. 142.4b Lac,

(iii) Ad diet (tho Proprietor of a Dissolved partnership firm ViMa Productions, in which tho Company was a partner) Rs. 16.9b Lac,

(iv) M&P Associates (Partnership firm in which directors are Partners): Rs. 40 Lac. for purchase of a fiat admeasuring 900 square foot in Dadar for a total consideration of Rs. 45 Lac.

(b) According to the information and explanations given to us. we arc of the opinion that the rate of interest and conditions of such loans given by the Company is prima facie prejudicial to the interest of the Company as no interest is charged on such loans.

(c) Wo arc unable to comment on regularity of repayment of principal amount because the torms of repayment have not boon stipulated. I hoso loans aro interest free.

(d) As por tho information and explanations given to us, efforts are being made for rocovory of amount outstanding as considered appropriate by tho management. As a result of these efforts, the Company entered into an Agreement with Mr. Apte of Ad-dict, whore under, he will repay Rs. 45 Lac to the Company against the book balance of Rs. 37.95 Lac Out of this sum of Rs. 45 i.ac. Mr. Apte has paid Rs. Lac during the previous year and has committed to pay Rs. 12 Lac each before 30th September 2013 and 30u September 2014. Further, Mr. P. P. Sheth, Director, has repaid Rs. 14.70 l ac and has re assuror! to repay all dues from him to the Company before 31'’ March 2013.

(4) In our opinion and according to the information and explanations given to & and having regard to the explanation there is adequate internal control procedures commensurate with the si/e of fho Company and the nature of its business, with regard to expenses , purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been notlcod in the internal controls

(5)

(a) fiasod on the audit procedure applied by us and according to information and explanation given to us. transaction that need to be entered into register maintained in pursuance ot section 301 of the Company Act 1956 have been so entered.

b) According to the information and explanation given to us in respect of transactions (excluding the loans reported in the para (3) above) in excess ot Rs. 5 Lac in respect of any party, in our opinion, the transactions have been made at prices which are prima facto reasonable having regard to the prevailing market price at the relevant time.

(6) In our opinion and according to the information and explanation given to us. the Company has not complied with the provisions of Soction 58 A, Section 58AA or any other relevant provision of the act and the rules framed there under as follows-

(a) The Company has defaulted w.e.f. October 2002 onwards in repayment of deposits matured and claimed and the outstanding amount of such unpaid matured deposits and interest thereon upto the date of maturity as on 31st March is Rs. 127.80 Lac (P/Y Hs. 135.54 I ac).

(b) The principal amount of Public fixed deposits matured for repayment and claimod by the depositors, which remain unpaid as on 31*! March 2012 amount to Hs. 62.81 l ac in case of small depositors and Hs. 43.77 l ac in all other casos. Appropriate intimation of default was sent to the Conpany Law Hoard, Mumbai from time to time, in rospcct of each month sincc default. I he Conpany has stopped acccpting / tenewing fixed deposits from the dato of first default. I he Company has been repaying the Deposits as and when cash flow position permits. 0

(c) I he Company had filed an application under section 58A ot Company Act, 1956 to Central Government for granting extension of repayment of deposits. The Company Lavs Board vide its order dated 14'h June 2010, has allowed the Company to repay the overdue and matured deposits upto 3 1bl March 2011. Hut the Company has not paid the deposit as per order.

(7) The Company has an internal audit system conducted by its own staff members, commensurate with the si/o and nature of the business of the Company.

(8) I he Central Government has prescribed the maintenance of cost records u/s 209(l)(d) of the Companies Act 1956. for the Company In absence of any construction activity tlrj Company has not maintained cost records. -

(9) According to the records of the Company, undisputed statutory dues including Income lax. Sales lax, Fringe Benefit Tax and other statutory duos have not been regularly deposited with the appropriate authorities. Provident Fund and LSI dues have generally been regularly deposited with the appropriate authorities during the year. Unclaimed dividend has been deposited with the Invostor Lducation and Protection Fund as required. There were no payments in respect of Customs Duty/ Fxciso Duty/ Service lax during the year. Basod on the audit procedure and according to the information and explanation given to us the extent of arrears of outstanding statutory duos as at the last day of the audit period for a period of more than 6 months from the date they became payable aro as under in Rs. Lac:

(10) According to tho information and explanations given to us and tho records of the Company, the duos of Income lax which have not boon deposited on account of any dispute, are as follows in Rs. Lac:

Nature of Duos Aorum where pending (Rs. In Lac)

Income lax A.V 2003 04 13.21 Incomo Tax Appellate Iribunal, Puno

Income lax A.Y.2005 06 9.63

(11) Iho accumulated losses of tho Company as at 3T*1 March 2012 are not less than 50% of tho not worth of the Company and it has incurred cash losses in the current financial period and in tho immediately preceding financial poriod.

(12) Based on our audit procedures and according to the information and explanations given to us tho Corrpany has defaulted in ropayment of duos to financial institutions, banks and amount of default is as stated heroundor in Hs. Lac (Also Hofor Notos ot financial statcmqnt no. 61

(13) Iho Company has not granted an^ loans and advances on tho basis of security by way of pledge of shares, dobonturos and other securities.

(14) Tho Company is not a chit fund, Nidhi / mutual benefit fund and therefore, the requirements pertaining to such class ot companios aro not applicable,

(15) fho Company is not dealing or trading in shares, securities, dobonturos and othor investments.

(16) Iho Company has givon in earlier poriod, guarantee tor loan taken by subsidiary trom bank, Iho said guarantee has since boon invokod by tho beneficiary has boon contested by Company.

(17.) No torm loans have boon availed by tho Company during tho poriod.

(18) According to tho Cash Tlow Statement and othor records examined by us and tho information and explanations givon to us, on an overall basis, funds raisod on short torm basis have prima facio not boon usod during tho poriod for long torm investments.

(19) the Company has not made any preferential allotment of share during the year to partlos and companios covorod in tho Rogistor maintainod under soction 301 of tho Companios Act, 19b6.

(20) the Company has not issued any debentures during tho year.

(21) the Company has not made any public issugs during tho year and thoroforo tho question ot disclosing the ond uso of monoy doos not ariso.

(22) Basod upon tho audit procedures performed and according to tho information and explanations givon and representations mado by tho managomont, wo roport that no fraud on or by tho Company has boon noticed or reported during tho yoar, nor havo wo boon informed of such case by tho management.

Oil S. H. AMDEKAR & COMPANY. Membership No. 37978

CHARIdh ACCOUNTANTS RN 100319W

S. H. AMDEKAR, Proprietor Puno, 31st August 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Jog Engineering Limited as at 31st March 2011 and also the Profit and Loss Account and Cash Flow statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books.

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, subject to:

i) Note no. 3 of Schedule M regarding recognition of certain claims as revenue in earlier years without evidence of final acceptability of the claims aggregating to Rs. 595.18 Lac (forming part of Debtors) which is not in accordance with Accounting Standard 7- "Accounting for construction contracts"

ii) Annexure to Auditor's Report regarding valuation of inventory aggregating Rs. 262.71 Lac of which net realizable value can not be ascertained which is not in accordance with Accounting Standard 2- "Valuation of inventory"

The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3(C) of Sec. 211 of the Companies Act 1956.

e) The Directors of the Company are eligible for appointment as a director of the Company by virtue approval by Ministry Of Corporate Affairs, Govt. Of India vide approval dated 31.03.2010.

f) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss Account read together with the company's accounting policies, and notes thereon give the information required by the Companies Act 1956 in the manner so required.

g) Attention is invited to the following notes in Schedule M:

i) Note no. 9 regarding non-provision of interest amounting to Rs. 470.86 Lac on mobilization I machinery advance received by the company recoverable by the Contractee through company's running account bill

ii) Note no. 1 (a) regarding non-provision of interest payable on deposits from public which are matured but not paid of amount Rs. 150.03 Lac

iii) Note no. 11 regarding diminution in value of long term equity investment in Mahakali Flyover Company Limited having value Rs. 69.97 Lac

h) We are unable to express an opinion on the treatment required to be given to the following items and on the ultimate recoverability of the under-mentioned debts /advances /claims.

a) Note no. 4(a) of Scn M regarding debtors outstanding for more than three years: Claims aggregating to Rs. 5,388.24 Lac (out of which Rs. 3,991.30 Lac receivable from subsidiary company) taken as income in earlier years considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

b) Note no. 4(b) of Sch M regarding Loans and advances given, claims aggregating to Rs. 764.10 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

c) Note no. 5 of Sch M regarding deposits with clients, claims aggregating to Rs. 455.96 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

So the effects of above on profit and loss of company can not be ascertained.

i) We have relied on the Management peiception in relation to business prospects as stated in note no. 2 while accepting the appropriateness of the going concern assumption for drawing up the accounts for the period. We are unable to form an opinion in the matter and are unable to express any view on any adjustment that may have to be made to the value of assets and liabilities in case such assumption of going concern basis is vitiated in any manner.

j) Without considering the matters referred to in para 'h' and 'i' above, the effect of which could not be determined and where we are unable to express an opinion, for the reasons stated in that paragraph, had the observations made by us in para "g (i), (ii) and (iv)" above been considered, there would be a loss of Rs. 1,546.21 Lac for the period ended 31st March 2011 (as against the reported figure of loss of Rs. 855.35 Lac), Profit & Loss Account (Debit balance being accumulated loss) would have been Rs. 4,623.83 Lac (as against the reported figure of Rs. 3,932.97 Lac).

5. Subject to our comments in paragraphs g, 'h', V and 'j' above, the said accounts read with the accounting policies and notes thereon give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

b) in the case of the Profit & Loss Account, of the loss for the year ended on that date;

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

STATEMENT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF JOG ENGINEERING LIMITED ON THE ACCOUNTS FOR THE PERIOD ENDED 31st MARCH 2011

(1)

(a) The Company has maintained records showing full particulars including quantitative details of fixed assets.

(b) A detailed scrutiny, reconciliation and physical verification of all assets was carried out and fully tallied with the Fixed Asset Register by management.

(c) As per the information and explanations given to us, the disposals of assets during the year were not substantial so as to have an impact on the operations of the Company or affect its going concern status.

(2)

(a) The inventory of construction material, consumables, stores and spare parts at the Company's one site having value Rs. 11.51 Lac for which criminal proceeding is in court of law. Pursuant to termination of a contract, Stocks having value of Rs. 251.20 Lac at the other site have been taken over by the Client of that site, which is a Company fully owned by the GoM and valuation thereof is as at the time of taking over by the Client, for which it has to give credit to the Company in the final accounts for that work, it terms of the Contract Conditions. The matter in respect of termination and its after-effects, including settlement of accounts is subjudice in the Hon'ble Bombay High Court. The net realizable value of this inventory cannot be ascertained.

(b) The stock at sites cannot be verify by management due facts narrated above.

(c) The Company is maintaining proper records of Inventory.

(3)

(a) As per the information and explanation given to us and the records produced to us for verification, the Company has made payment on behalf of / paid advances to following:

(i) Mahakali Flyover Company Ltd. (a subsidiary the Company) Rs. 550.00 Lac: Pursuant to encashing by the PWD-GoM a Bank Guarantee of equal amount issued by the Company's Bank, for a contract that was assigned to this subsidiary:

(ii) Mr. P. P. Sheth (Director of the Company) Rs. 157.15 Lac,

(iii) M/s. Ad-dict (the Proprietor of a Dissolved partnership firm ViMa Productions, in which the Company was a partner) Rs. 16.95 Lac (P/Y Rs. 37.95 Lac),

(iv) M/s. M&P Associates (Partnership firm in which directors are Partners): Rs. 40 Lac, for purchase of a flat admeasuring 900 square feet in Dadar for a total consideration of Rs. 45 Lac.

(b) According to the information and explanations given to us, we are of the opinion that the rate of interest and conditions of such loans given by the Company is prima facie prejudicial to the interest of the Company as no interest is charged on such loans.

(c) We are unable to comment on regularity of repayment of principal amount because the terms of repayment have not been stipulated. These bans are interest free.

(d) As per the information and explanations given to us, efforts are being made for recovery of amount outstanding as considered appropriate by the management. As a result of these efforts, the Company entered into an Agreement with Mr. Apte of Ad-dict, where under, he will repay Rs. 45 Lac to the Company against the book balance of Rs. 37.95 Lac. Out of this sum of Rs. 45 Lac, Mr. Apte has paid Rs. 21 Lac during the current year and has committed to pay Rs. 12 Lac each before 30* September 2013 and 30th September 2014. Further, Mr. P. P. Sheth, Director, has repaid Rs. 30.90 Lac, which has been adjusted against Rs. 31.70 receivable from Mr. K. C. Sheth, to whom Mr. P. P. Sheth had agreed to be a Guarantor. Mr. P. P. Sheth has re-assured to repay all dues from him to the Company before 30th September 2011.

(4) In our opinion and according to the information and explanations given to us and having regard to the explanation there is adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(5)

(a) Based on the audit procedure applied by us and according to information and explanation given to us, transaction that need to be entered into register maintained in pursuance of section 301 of the Company Act 1956 have been so entered.

(b) According to the information and explanation given to us in respect of transactions (excluding the loans reported in the para (3) above) in excess of Rs. 5 Lac in respect of any party, in our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

(6) In our opinion and according to the information and explanation given to us, the Company has not complied with the provisions of Section 58A, Section 58AA or any other relevant provision of the act and the rules framed there under as follows:

(a) The Company has defaulted w.e.f. 1st October 2002 onwards in repayment of deposits matured and claimed and the outstanding amount of such unpaid matured deposits and interest thereon upto the date of maturity as on 31 * March 2011 is Rs. 135.54 Lac (PY Rs. 150.66 Lac).

(b) The principal amount of Public fixed deposits matured for repayment and claimed by the depositors, which remain unpaid as on 31st March 2011 amount to Rs. 66.98 Lac in case of small depositors and Rs. 47.04 Lac in all other cases. Appropriate intimation of default was sent to the Company Law Board, Mumbai from time to time, in respect of each month since default. The Company has stopped accepting / renewing fixed deposits from the date of first default. The Company has been repaying the Deposits as and when cash flow position permits.

(c) The Company had filed an application under section 58A of Company Act, 1956 to Central Government for granting extension of repayment of deposits. The Company Law Board vide its order dated 14lh June 2010, has allowed the Company to repay the overdue and matured deposits upto 31th March 2011. But the Company has unable to repay the deposit as order.

(7) The Company presently does not have a formal internal audit system. The management thinks, considering the present workload and the Company cannot afford to have an independent Interna' Auditor. However, the CMD or ED or Accounts Officer internally checks all accounts. Thus it has a procedure of internal checks and controls, which should be strengthened to make it commensurate with the size and nature of the business of the Company.

(8) To the best of our knowledge, and according to the information given to us, the Central Government has not prescribed the maintenance of cost records u/s 209(1 )(d) of the Companies Act 1956, for the Company.

(9) According to the records of the Company, undisputed statutory dues including Income Tax, Sales Tax, Fringe Benefit Tax and other statutory dues have not been regularly deposited with the appropriate authorities. Provident Fund and ESI dues have generally been regularly deposited with the appropriate authorities during the year. Unclaimed dividend has been deposited with the Investor Education and Protection Fund as required. There were no payments in respect of Customs Duty/ Excise Duty/ Service Tax during the year. Based on the audit procedure and according to the information and explanation given to us the extent of arrears of outstanding statutory dues as at the last day of the audit period for a period of more than 6 months from the date they became payable are as under in Rs. Lac:

Nature of Dues As on 31/03/2011

Income Tax / TDS 36.78

Sales Tax 24.05

Works Contract Tax 206.49

Fringe Benefit Tax 6.46

(10) According to the information and explanations given to us and the records of the Company, the dues of Sales Tax / Income Tax which have not been deposited on account of any dispute, are as follows in Rs. Lac:

Nature of Dues Amount Forum where pending Sales Tax 623.68 Sales Tax (FY 01-02) Officer

Sales Tax 148.52 Sales Tax (FY 02-03) Officer

Sales Tax 73.38 Sales Tax (FY 03-04) Officer

Sales Tax 90.30 Sales Tax (FY 04-05) Officer

Income Tax A.Y. 13.29 Income Tax Appellate 2003-04 Tribunal, Pune

Income Tax A.Y. 9.63 2005-06

(11) The accumulated losses of the Company as at 31st March 2011 are not less than 50% of the net worth of the Company and it has incurred cash tosses in the current financial period and in the immediately preceding financial period.

(12) Based on our audit procedures and according to the information and explanations given to us the Company has defaulted in repayment of dues to financial institutions, banks and amount of default is as stated hereunder in Rs. Lac

Sr. Name of the Bank/ Amount of default as No. Financial Institution on 31.03.2011 (As per books of accounts)

1 Bank of Maharashtra 3,657.03

2 Andhra Bank 3,256.67

3 Development Credit Bank Ltd 2,043.28

4 IDBI Bank 1,029.76

Total 9,986.75

(Also Refer Schedule M - Notes to Account - No. 18)

(13) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(14) The Company is not a chit fund, Nidhi / mutual benefit fund and therefore, the requirements pertaining to such class of companies are not applicable.

(15) The Company is not dealing or trading in shares, securities, debentures and other investments.

(16) The Company has given in earlier period, guarantee for loan taken by subsidiary from bank. The said guarantee has since been invoked by the beneficiary has been contested by Company.

(17) No term loans have been availed by the Company during the period.

(18) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an over all basis, funds raised on short term basis have prima facie not been used during the period for long term investments.

(19) The Company has not made any preferential allotment of share during the year to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(20) The Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

(21) The Company has not made any public issues during the year and therefore the question of disclosing the end use of money does not arise.

(22) Based upon the audit procedures performed and according to the information and explanations given and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management

FOR S. H. Amdekar & CO Chartered Accountants S. H. Amdekar Proprietor Membership No. 37978 FRN 100319W Pune, 11th August 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Jog Engineering Limited as at 31st March 2010 and also the Profit and Loss Account and Cash Flow statement of the Company for the period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books.

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, subject to

a. Note no. 4 of Schedule M regarding recognition of certain claims as revenue in earlier years without evidence of final acceptability of the claims aggregating to Rs . 595.18 Lac (forming part of Debtors) which is not in accordance with Accounting Standard 7: "Accounting for construction contracts"

b. Annexure to Auditors Report regarding valuation of inventory aggregating Rs. 262.71 Lac of which net realizable value can not be ascertained which is not in accordance with Accounting Standard 2- "Valuation of inventory".

Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in 211 -3(C)of the Companies Act 1956.

e) The Directors of the Company are eligible for appointment as a director of the Company by virtue approval dated 31/03/2010 by Ministry of Corporate Affairs, Government of India.

f) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss Account read together with the Companys accounting policies, and notes thereon give the information required by the Companies Act 1956 in the manner so required.

g) Attention is invited to the following notes in Schedule M:

i) Note no. 10 regarding non-provision of interest amounting to Rs. 470.86 Lac on advance received by the Company recoverable by the contractee through Companys RA bill.

ii) Note no. 1 regarding non-provision of interest payable on deposits from public which are matured but not paid of amount Rs. 132.90 Lac

iii) Note no. 8 regarding delayed payment of fixed deposits accepted from public and interest thereon.

iv) Note no. 13 regarding no diminution in value of long term equity investment in Mahakali Flyover Company Limited having value Rs. 69.97 Lac

h) We are unable to express an opinion on the treatment required to be given to the following items and on the ultimate recoverability of the under-mentioned debts I advances I claims.

a) Note no. 5 (a) of Sch M regarding debtors outstanding for more than three years: Claims aggregating to Rs. 5,393.04 Lac (out of which Rs. 3,991.28 Lac receivables from subsidiary companies) taken as income in earlier years considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

b) Note no. 5 (b) of Sch M regarding Loans and advances given, claims aggregating to Rs. 745.10 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable.

c) Note no. 6 of Sch M regarding deposits with clients, claims aggregating to Rs. 454.36 Lac, considered by the Management as good and recoverable in respect of which the ultimate shortfall in recovery, if any, is not presently quantifiable. So the effects of above on profit and loss of Company can not be ascertained.

i) We have relied on the Management perception in relation to business prospects as stated in note no. 2 while accepting the appropriateness of the going concern assumption for drawing up the accounts for the period. We are unable to form an opinion in the matter and are unable to express any view on any adjustment that may have to be made to the value of assets and liabilities in case such assumption of going concern basis is vitiated in any manner.

j) Without considering the matters referred to in para h and i above, the effect of which could not be determined and where we are unable to express an opinion, for the reasons stated in that paragraph, had the observations made by us in para "g (i), (ii) and (iv)" above been considered, there would be a loss of Rs. 1,248.97 Lac for the period ended 31" March 2010 (as against the reported figure of Joss of Rs. 575.24 Lac), Profit & Loss Account (Debit balance being accumulated loss) would have been Rs. 3,751.35 Lac (as against the reported figure of Rs. 3,077.62 Lac.)

5. Subject to our comments in paragraphs g, h, i and j above, the said accounts read with the accounting policies and notes thereon give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

b) in the case of the Profit & Loss Account, of the loss for the period ended on that date;

c) in the case of Cash Flow Statement, of the cash flows for the period ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Statement referred to in paragraph 3 of our report of even date to the members of Jog Engineering Limited on the accounts for the period ended 31/03/2010

(1)

(a) The Company has, maintained records showing full particulars including quantitative details of fixed assets.

(b) A detailed scrutiny, reconciliation and physical verification of all assets was carried out and fully tallied with the Fixed Asset Register by management In the result,

(b) Several assets that had outlived their useful life have been written off.

(c) Certain assets although in fact scrapped and sold had still remained to be struck off from the Asset Register. This has been fully corrected.

(d) All items of "assets" with purchase value of less than Rs. 5,000/- but had remained to be struck off from the Asset Register. As result of above the asset of Rs. 2.68 Crore is written off during audit period

(c) As per the information and explanations given to us, the disposals of assets during the year were not substantial so as to have an impact on the operations of the Company or affect its going concern status.

(2)

(a) The Inventory of construction material, consumables, stores and spare parts at Companys one site having value of Rs. 11.51 Lac for which criminal proceeding are in court of law.

Pursuant to termination of a contract, Stocks at the other site having value of Rs. 251.20 Lac have been taken over by the Client of that site, which is a Company fully owned by the GoM and valuation thereof is as at the time of taking over by the Client, for which it has to give credit to the Company in the final accounts for that work, it terms of the Contract Conditions. The matter in respect of termination and its after-effects, including settlement of accounts is subjudice in the Honble Bombay High Court. The net realizable value of this inventory can not be ascertained.

(b) The procedures of physical verification of Inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of Inventory and as explained to us, the discrepancies noticed on verification between physical stock and the book records were not material and those have been properly dealt with in the books of account.

(3)

(a) As per the information and explanation given to us and the records produced to us for verification, the Company has made payment on behalf of/ paid advances to following:

i) Mahakali Flyover Company Ltd. (a subsidiary Company) Rs. 550.00 Lac: Pursuant to PWD-GoM encashing a Bank Guarantee of equal amount issued by the Companys Bank, for a contract that was assigned by the Company to this subsidiary:

ii) . Mr. P. P. Sheth, a Director of Company: (Rs.157.15 Lac):

iii) Ad-dict, the Proprietor of a Dissolved partnership firm ViMa Productions, in which Company was partner (Rs. 37 95 Lac):

iv) M&P Associates, Partnership firm in which directors are Partners (Rs. 40.00 Lac): For purchase of a flat admeasuring 900 square feet in Dadar for a total consideration of Rs. 45 Lac.

(b) According to the information and explanations given to us, we are of the opinion that the rate of interest and conditions of such loans given by the Company is prima facie prejudicial to the interest of the Company as no interest is charged on such loans.

(c) We are unable to comment on regularity of repayment of principal amount because the terms of repayment have not been stipulated. These loans are interest free.

(d) As per the information and explanations given to us, efforts are being made for recovery of amount outstanding as considered appropriate by the management.

(4) In our opinion and according to the information and explanations given to us and having regard to the explanation there is adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(5) (a) Based on the audit procedure applied by us and according to information and explanation given to us, transaction that need to be entered into register maintained in pursuance of section 301 of the Company Act 1956 have been so entered.

(b) According to the information and explanation given to us in respect of transactions (excluding the loans reported in the para (iii) above) in excess of Rs. 5 Lac in respect of any party, in our opinion, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

(6) In our opinion and according to the information and explanation given to us, the Company has not complied with the provisions of Section 58A, Section 58AA or any other relevant provision of the act and the rules framed thereunder as follows:

(a) The Company has defaulted w.e.f. 01/10/2002 in repayment of deposits matured and claimed and the outstanding amount of such unpaid matured deposits and interest thereon upto date of maturity as on 31/03/2010 is Rs. 150.66 Lac.

(b) Public fixed deposits matured for repayment and claimed by the depositors which remain unpaid as on 31/03/2010 amount to Rs. 69.55 Lac in case of small depositors and Rs. 45.53 Lac in all other cases. Appropriate intimation of default was sent to the Company Law Board, Mumbai from time to time, in respect of each month since default. The Company has stopped accepting / renewing fixed deposits from the date of first default. The Company has been repaying the Deposits as and when cash flow position permits.

(c) The Company had filed an application under section 58A (9) of Company Act, 1956 to Central Government for granting extension of repayment of deposits. The Company Law Board vide its order dated 14/06/2010, has allowed the Company to repay the overdue and matured deposits upto 31/03/2011, subject to that half of the deposits shall be repaid by 31/12/2010.

(7) The Company presently does not have a formal internal audit system. The management thinks, considering the present work load and the Company can not afford to have an independent Internal Auditor. However, all accounts are internally checked by the CMD or ED or Accounts Officer. Thus it has a procedure of internal checks and controls. This may be required to be strengthened to make it commensurate with the size and nature of the business of the Company.

(8) To the best of our knowledge, and according to the information given to us, the Central Government has not prescribed the maintenance of cost records u/s 209(l)(d) of the Companies Act 1956. for the Company.

(9) According to the records of the Company, undisputed statutory duos including Income Tax, Sales Tax, Fringe Benefit Tax and other statutory dues have not been regularly deposited with the appropriate authorities.

Provident Fund and ESI dues have been regularly deposited with the appropriate authorities during the year.

Unclaimed dividend has been deposited with the Investor Education and Protection Fund as required.

There were no payments in respect of Customs Duty / Excise Duty / Service Tax during the year. Based on the audit procedure and according to the information and explanation given to us the extent of arrears of outstanding statutory dues as at the last day of the audit period for a period of more than 6 months from the date they became payable are as under:

Amount in arrears for more than 6 Nature of Dues months as on 31/03/2010 (Rs. Lac)

Income Tax 53.79

Sales Tax 32.95

Works Contract Tax 187.97

Fringe Benefit Tax 6.46

(10) According to the information and explanations given to us and the records of the Company, the dues of Sales Tax / Income Tax which have not been deposited on account of any dispute, are as follows:

Nature of Dues Amount (Rs. Lac) Forum where dispute is pending

Sales Tax (96-97) 2.88 Asst, Commissioner of Sales Tax, Appeals

Income Tax A.Y, 2001-02 5.05 Income Tax Appellate Tribunal, Pune

(11) The accumulated losses of the Company as at 31/03/2010 are not less than 50% of the net worth of the Company and it has incurred cash losses in the current financial period and in the immediately preceding financial period.

(12) Based on our audit procedures and according to the information and explanations given to us the Company has defaulted in repayment of dues to financial institutions, banks and the period and amount of default is as stated hereunder;

Name of the Bank / Financial Institution Amount (Rs. Lac) as on 31/03/2010

Bank of Maharashtra 2,560

Andhra Bank 1,938

Development Credit Bank 1,608

IDBI Bank 938

Total 7,044

(Please also Refer Schedule M - No. 21)

(13) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(14) The Company is not a Chit Fund, Nidhi / Mutual Benefit Fund. Therefore, the requirements, pertaining to such class of companies are not applicable.

(15) The Company is not dealing or trading in shares, securities, debentures and other investments.

(16) The Company has given in earlier period, guarantee for loan taken by subsidiary from bank. The said guarantee has since been invoked by the beneficiary has been contested by Company.

(17) No term loans have been availed by the Company during the period.

(18) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an over all basis, funds raised on short term basis have prima facie not been used during the period for long term investments.

(19) The Company has not made any preferential allotment of share during the year to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(20) The Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

(21) The Company has not made any public issues during the year and therefore the question of disclosing the end use of money does not arise.

(22) Based upon the audit procedures performed and according to the information and explanations given and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

FOR S. H. AMDEKAR&CO

CHARTERED ACCOUNTANT

S. H. AMDEKAR

Proprietor

Membership No. 37978

Pune, 21st August 2010